AT&T launching 3 Microsoft-powered phones

NEW YORK 
Microsoft Corp. will launch three new smart phones with AT&T Inc. ahead of the holiday shopping season. The new phones will run on Microsoft's new mobile software in a test of whether Microsoft can catch up with rivals in the fast-growing smart phone market.

The new handsets will go up against both the iPhone and the expanding number of phones running on Google Inc.'s Android operating system.

The phones AT&T plans to launch will be manufactured by HTC Corp., LG Electronics Inc. and Samsung Electronics Co. The first will go on sale Nov. 8, with two more coming a few weeks later.

The phones could help AT&T make up for the possible loss of its exclusive rights to sell Apple Inc.'s hugely popular iPhone. Published reports say the iPhone is coming to Verizon Wireless by early next year.

For Microsoft, the new devices represent one step in an uphill struggle.

In the most recent quarter, the company's existing cell phone software accounted for just 5 percent of the worldwide smart phone market. That compares with 41 percent for Nokia Corp.'s Symbian system, 18 percent for Research in Motion Ltd.'s BlackBerry phones, 17 percent for Android and 14 percent for the iPhone.

At an event in New York on Monday, Microsoft CEO Steven Ballmer said the company's new software will power "a very different kind of phone" than customers are used to.

"We want you to get in, get out and back to your life," he said.

The iPhone and Android are popular in part because of the tens of thousands of tiny applications, or "apps," made by outside software developers. But those developers may not want to devote the resources to build programs for another smart phone system until it gains traction with users.

In the past, Microsoft focused narrowly on building phone software, giving handset makers and wireless carriers lots of leeway to adapt and customize their products. In the wake of the iPhone's success, Microsoft has adjusted its strategy, retaining more control over the way the phones look and work.

The iPhone prompted a generation of look-alike smart phones, with screenfuls of tiny square icons representing each program. Microsoft has tried to avoid an icon-intensive copy, instead relying more on clickable words and images generated by content. For example, a weather program might show a constantly updated snapshot of weather conditions; photo or music libraries would be represented by a recent snapshot or the cover of the last album played on the device.

Windows Phone 7 borrows its aesthetic from the company's Zune media players, and the entertainment "hub" on the phone is based on the Zune the same way the music on the iPhone is filed under the "iPod" section.

Many other Microsoft programs and services come built in on the new phones. There's a mobile version of the Bing search engine, for example, and a games "hub" that can connect to Xbox Live, Microsoft's online gaming community.

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AP Business Writer Andrew Vanacore in New York and AP Technology Writer Jessica Mintz in Seattle contributed to this report.